According to a new study from the Federal Reserve, median net worth for middle-class families dropped by nearly 40% from 2007 to 2010, primarily because of the plummeting value of homes. ~ Senator Sanders
Minneapolis, Minnesota (PRWEB) September 12, 2012
Pacifica Companies is the first winning bidder in Federal Housing Finance Agency’s REO pilot initiative, purchasing 699 Fannie Mae properties in Florida. The bid is won and announced as the first winning bidder in Fannie’s pilot program to sell repossessed homes in bulk to investors on the condition they convert them to rentals.
“The transaction is designed to promote home price stability, improve quality of housing stock, and enhance rental inventory of markets by utilizing a rent and hold strategy,” said Fannie Mae. The good news is that the FHFA also stated all properties were sold near or above market value.
The REO Initiative was developed in conjunction with the U.S. Department of the Treasury, U.S. Department of Housing and Urban Development, Federal Deposit Insurance Corporation, the Federal Reserve System, Fannie Mae and Freddie Mac. Attention was focused on how to handle the drain of staggering numbers of foreclosure properties on the market, and the initiative was begun, after review of more than 4,000 responses to a Request For Information on how to sell REO properties of Fannie Mae, Freddie Mac and the Federal Housing Administration.
Pacifica paid a sum greater than $12.3 million for 699 occupied and vacant single-family properties located throughout the struggling real estate communities in Florida, based on details from Fannie Mae and its regulator, the Federal Housing Finance Agency. The transaction, part of a larger program that’s faced opposition from the state’s Realtors trade group, closed on September 6th.
According to the Foreclosure Data Bank, "Pacifica and Fannie Mae own interest in a newly formed LLC that holds the properties located in Florida. According to the business structure, the mortgage servicer will get 90% of the limited liability company’s rental revenue, until it reaches the $49 million mark. From then on, Fannie Mae’s share will drop to 50% while the other party, Pacifica, will get the balance in both situations."
It is notable to Jenna Thuening, owner of Home Destination, that the award winner, whom we are all happy for, was "comfortable" with tight cash flow margins. Perhaps that is necessary for bulk purchases. "However, we need to see the average American citizen able to afford to keep their home, and that first-time buyers have the chance to share the American dream of owning a home. We need to see more help for those that cannot obtain mortgages due to tight lending standards, as highlighted by Federal Reserve Chairman Ben Bernanke on July 17th," said Jenna.
We learned from the Dodd Frank audit that "the Federal Reserve provided a jaw-dropping $16 trillion in virtually zero interest loans to every major financial institution in this country, central banks all over the world, large corporations and, in fact, to wealthy individuals," according to Senator Bernard Sanders Floor Statement on June 27, 2012". Perhaps the greater need is for the FHFA to focus on how to help lower income families and middle-class Americans find affordable home loans.
"In the United States today we have the most unequal distribution of wealth and income since the 1920's," according to Federal Reserve statistics found in the audit, the data shows the US wealthy investors are the ones benefiting and increasing their wealth while fewer citizens than ever are even able to own a home:
- Today the top 1% own 40% of all of the wealth in America.
- Today the wealthiest 400 individuals in America own more wealth than the bottom half of America, 150 million people.
- The bottom 40% of the American people own 0.3% of the wealth of this country.
- Median net worth for middle-class families dropped by nearly 40% from 2007 to 2010
The FHFA press release stated it will announce winning investors for properties in other areas in the coming weeks when the transactions close. The news is highly anticipated and perhaps a bit nerve racking to many who wish to have such an opportunity for their family home, but who live a little less comfortably within tight cash flow margins.
Contact Home Destination if you are a Twin Cities homeowner needing options to buy a home in the middle of today's tight lending standards. We are hopeful that our government agencies are working hard to represent the middle-class families of this country, and are passionate to help families afford the home they desire.